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Nissan North America, Inc. v. Scott

Supreme Court of Alabama

August 11, 2017

Nissan North America, Inc.
v.
Adrienne Scott

         Appeal from Montgomery Circuit Court (CV-16-901575)

          SELLERS, Justice.

         Nissan North America, Inc. ("Nissan"), appeals from an order of the Montgomery Circuit Court compelling it to arbitrate certain claims filed against it by Adrienne Scott ("Scott"). We reverse and remand.

         Facts and Procedural History

         On July 16, 2015, Scott purchased from Jack Ingram Motors, Inc. ("Jack Ingram"), a new 2015 Nissan Juke automobile, which had been manufactured by Nissan. In connection with the sale of the vehicle, Scott signed an arbitration agreement that states, in relevant part:

"Buyer/Lessee acknowledges and agrees that the vehicle Buyer/Lessee is purchasing or leasing from Dealer has traveled in interstate commerce. Buyer/Lessee thus acknowledges that the vehicle and other aspects of the sale, lease or financing transaction are involved in, affect, or have a direct impact upon interstate commerce.
"Buyer/Lessee and Dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as an incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspect of the vehicle and its sale, lease, or financing shall be settled by binding arbitration by one arbitrator selected by the Dealer with consent of the Buyer/Lessee conducted pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C. Section 1 et seq. Without limiting the generality of the foregoing, it is the intention of the Buyer/Lessee and the Dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale, lease, or financing, and its condition, including disputes concerning the terms and conditions of the sale, lease, or financing, the condition of the vehicle, any damage to the vehicle, the terms and conditions of any of the documents signed or given in connection with the sale, lease or financing, any representations, promises or omissions made in connection with negotiations for the sale, lease, or financing of the vehicle, or any terms, conditions, representations or omissions made in connection with the financing, leasing, credit life insurance, disability insurance, vehicle extended warranty or service contract or other products or services acquired as an incident to the sale, lease or financing of the vehicle.
"Either party may demand arbitration by serving upon the other party a written demand for arbitration along with a statement of the matter in controversy. The Buyer/Lessee and the Dealer agree that the arbitration proceedings to resolve all such disputes shall he conducted in the city where the dealer's facility is located. ..."

(Emphasis added.)

         On November 15, 2015, Scott took the vehicle to Jack Ingram after smelling fuel in the interior of the vehicle. Jack Ingram informed Scott that it did not detect the smell of fuel inside the vehicle, that it had inspected the fuel system of the vehicle, and that it found no leaks in the fuel system. Two days later, while Scott was driving the vehicle, it spontaneously caught fire.

         On November 22, 2016, Scott filed a complaint against Jack Ingram and Nissan, alleging that she had suffered physical injuries as well as mental anguish as a result of the fire; that she had incurred medical expenses for her physical injuries; and that her vehicle was a total loss. Count one of the complaint sought damages against Nissan under the Alabama Extended Manufacturer's Liability Doctrine; count two of the complaint sought damages against Nissan for negligence and wantonness; count three of the complaint sought damages against both Nissan and Jack Ingram for breach of warranty; and count four of the complaint sought damages against Jack Ingram for negligence.

         On December 27, 2016, Jack Ingram moved to compel arbitration of the claims filed against it based on the arbitration agreement Scott had signed in connection with the sale of the vehicle. Scott filed a response indicating that, although she was willing to arbitrate her breach-of-warranty and negligence claims against Jack Ingram, she objected to litigating part of the case, i.e., her claims against Nissan, because, she said, "to do so would require all of the parties to incur extra expenses and could result in inconsistent judgments." She indicated in her response that she was willing to arbitrate the case or to litigate the case, but she objected to having to do both. On February 22, 2017, the trial court entered an order holding that, "in the interest of judicial economy, " the entire matter should be arbitrated. Nissan filed a motion to reconsider, which the trial court denied. Nissan appeals pursuant to Rule 4(d), Ala. R. App. P.

         Standard of Review

"This Court's standard of review on an appeal from a trial court's order granting or denying a motion to compel arbitration is well settled. Bowen v. Security Pest Control, Inc., 879 So.2d 1139, 1141 (Ala. 2003). A direct appeal is the proper procedure by which to seek review of such an order, Rule 4(d), Ala. R. App. P., and this Court will review de novo the trial court's grant or denial of a motion to compel arbitration. Bowen, 879 So.2d at 1141. The party seeking to compel arbitration has the initial burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction involving interstate commerce. Polaris Sales, Inc. v. Heritage Imports, Inc., 879 So.2d 1129, 1132 (Ala. 2003). The party seeking to compel arbitration must present some evidence tending to establish its claim. Wolff Motor Co. v. White, 869 So.2d 1129, 1131 (Ala. 2003). Once the moving party meets that initial burden, the party opposing arbitration has the burden of presenting ...

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